DCIT, CIR-5(1)KOLKATA, KOLKATA vs. BARANJ COAL MINES PVT LTD , KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH AT KOLKATA Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No(s). 323/KOL/2026 Assessment Year(s) 2022-23 DCIT, Cir-5(1), Kolkata Baranj Coal Mines Pvt. Ltd. Vs. (Appellant) (Respondent) PAN: AAJCB4681Q Appearances: Department represented by : Sanjib Kumar Paul, Addl. Sr. DR. Assessee represented by : Aryan Sinha, AR. Date of concluding the hearing : 29.06.2026 Date of pronouncing the order : 08.07.2026 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2022-23 dated 10.11.2025. 2. The Revenue is in appeal before the Tribunal raising the following grounds of appeal: "1 Whether the Ld. CIT(A) erred in fact as well as in law by allowing the appeal of the assessee and by deleting addition of Rs.2,58,67,715/- in violation of provision of Rule 46A of the Income Tax Rule, 1962 without appreciating the fact that in course of assessment proceedings, assessee failed to furnish the reconciliation statement regarding turnover reported in GSTR-3B and GSTR-9 vis-à-vis the turnover reported in audited financials which was furnished in course of appellate proceedings. 2. That the appellant craves leave to add, alter, amend, modify the grounds of appeal before, at the time of hearing, or thereafter, if so required."

Business: Income as per ITR Rs. 8,85,85,920/- Add: Difference in turnover (as per Rs. 2,58,67,715/- Table below) added as income

Rs. 11,44,53,635/-

Total income assessed u/s 143(3) of (or) Rs. 1,44,53,640/- the Act r.w.s. 144B of the Act

Taxable turnover of Rs. Rs.172,72,04,215 172,72,04,215/- as per GSTR-3B in Traces & as in GSTR-9, dt.30/12/2022 taken as correct turnover against Mining service charges in its ITR's Trading A/ct at Rs.170,13,37,000/- admitted, since its reconciliation done on 16/03/2024 militates against turnover in GSTRS ( supra)

(-)Mining service in its ITR's Trading Rs.170,13,37,000 A/c at Rs.170,13,37,000/-

Difference in turnover to be added Rs. 2,58,67,715 as income

Assessed u/s 143(3) of the Act r.w.s. 144B of the Act. 9. The Ld. CIT(A) has considered the submission of the assessee and the facts of the case submitted before the Ld. CIT(A) are as under:

“3. Facts of the case: (As per Form NO. 35): "1. The assessee company, Baranj Coal Mines Private Limited (the Appellant herein) filed its return of income for the assessment year 2022-23 on09.11.2022 with a total income of Rs.8,85,85,920. 2. Later on, the return of income was selected for scrutiny assessment undersection 143(3) of the Income Tax Act 1961 vide DIN: ITBA/AST/S/143(2)/2023- 24/1053434573(1) dated 01.06.2023 3. Appellant had submitted required documents/books accounts/information/explanation etc. in response to the notice under section 142(1) vide DIN: ITBA/AST/F/142(1)/2023-2024/1057463072(1) 4. A provisional assessment was thereafter made by the Assessment Unit (AU)determining the total income to be Rs.38,76,73,403 i.e. in an addition of Rs.29,90,87,488 was made to the returned income of Rs.8,85,85,920 and a show cause notice was issued by the AU as to why the proposed variation

“The Appellant, Baranj Coal Mines Private Limited (BCMPL) is a company incorporated under the Companies Act 2013 and is a Mine Operator (MO) of the Captive Coal Block namely Integrated Baranj Open Cast Mines (IBOCM) of

“6.1.2 Summary of the Appellant's Submission: 1. Incorrect Reliance on GST Turnover: The Assessing Unit erred in adopting the turnover of Rs. 172,72,04,215 from GST returns (GSTR-3B and GSTR- 9) instead of Rs. 170,13,36,592 as per audited financial statements. GST

Turnover erroneously considered in the Assessment Order u/s 143(3) dated 1,72,72,04,215 25.03.2024 being the figure as shown in GSTR-3B and GSTR-9

Less: Government Payments not to be considered as Turnover and hence as Taxable Income since the same was 29,95,47,498 collected on behalf of the State Government

Less: GST Liability under Reverse Charge Mechanism shown as Turnover 55,000 in GSTR-3B and GSTR-9

Add: Provisional Invoice for March 22 considered as Turnover / Taxable Income in the audited Financials for the FY: 2021-22 (AY: 2022-23) but not 27,37,34,874 considered in GST Records since the GST Invoice for March'22 was raised in April'22 i.e. in subsequent Assessment Year

RECONCILIATION STATEMENT Particulars Amount (Rs.)

Turnover correctly considered in the audited financials, IIR, Tax Audit Report 1,70,13,36,591 u/s 44AB and GSTR-9

After careful consideration, it is found that the reconciliation is satisfactory, and the Assessing Officer has not pointed out any specific discrepancy therein. The assessee has also relied upon judicial precedents including Shapoorji Pallonji & Co. Ltd. v. DCIT [2020] 120 taxmann.com 56 (Mumbai ITAT), ITO v. Chowgule & Co. Pvt. Ltd. [2021] 129 taxmann.com 293 (Mumbai ITAT), and PCIT v. Gujarat State Fertilizers & Chemicals Ltd. [2019] 416 ITR 85 (Guj), wherein it has been consistently held that GST or statutory records cannot override audited financials for income-tax computation and statutory levies collected on behalf of the Government do not form of taxable turnover. Accordingly, based on the facts discussed above and in light of the judicial precedents relied upon, the addition of Rs. 2,58,67,715/- made by the Assessing Officer solely on the basis of the difference between GST records and audited financials is held to be unjustified, devoid of merit, and unsustainable in law. The reconciliation furnished by the assessee has been found to be satisfactory, and no contrary evidence has been brought on record by the Assessing Officer. Therefore, the addition of Rs. 2,58,67,715/- is hereby deleted. 8. In the result, present appeal is ALLOWED.” 12. We have considered the submission made, gone through the facts of the case and note that the assessee had duly reconciled the turnover of ₹170,13,36,591/- which was correctly considered in the audited financials, ITR, tax audit report u/s 44AB of the Act and GSTR-9 and the Ld. AO had erroneously considered the turnover as ₹172,72,04,215/- being the figure as shown in GSTR-3B and GSTR-9 in the impugned order dated 25.03.2024. Since the government payments of ₹2,99,54,749/-, the GST liability under reverse charge mechanism shown as turnover in GSTR-3B and GSTR-9 at ₹55,000/- were not reduced from the turnover shown in the GSTR-3B and GSTR-9, and a sum of ₹27,37,34,874/- was

Assistant Registrar ITAT, Kolkata Benches Kolkata